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Do employers and workers underbid prevailing wages if there is unemployment? Do employers take advantage of workers' underbidding by lowering wages? We hypothesize that under conditions of incomplete labor contracts, wage levels may positively affect workers' propensity to cooperate. This, in...
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market theory and personnel economics. Our starting point is the observation that employment relations are frequently … governed by incomplete contracts. We show that the norm of reciprocity that leads to gift exchanges is an effective contract … labour market phenomena that are puzzles from the viewpoint of standard economic theory. Further issues in the related field …
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This paper shows that reciprocity has powerful implications for many economic domains. It is an important determinant in the enforcement of contracts and social norms and enhances the possibilities of collective action greatly. Reciprocity may render the provision of explicit incentive...
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mechanism should - in theory - provide incentives for truth-telling, many buyers in fact believe that they can increase their …
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